Market Overview: Crude Oil Futures
Crude oil bears need follow-through bear bars on the weekly chart to increase the odds of a deeper pullback. Bulls see the current move as a pullback and hope it will lack follow-through selling, followed by another retest of the March 9 high.
Crude oil futures
The Weekly crude oil chart
- This week’s candlestick is a big outside bear bar closing in its lower half, with prominent upper and lower tails.
- Last week, we said traders would watch whether bulls could generate a breakout above the March 9 high with sustained follow-through, or if the market would fail above it with prominent upper tails or bear bars.
- The market traded slightly higher early in the week, followed by a deep pullback to the middle of the trading range.
- Bulls got a retest of the March 9 high, but the move lacked follow-through buying, forming a lower high and a double top.
- Bulls see the current move as a pullback and hope it will lack follow-through selling, followed by another retest of the March 9 high.
- Bulls see a double bottom bull flag forming (March 23 and April 8).
- If the market trades lower, bulls want the 20-week EMA to act as support.
- Bulls need consecutive strong bull bars to increase the odds of a breakout above the March 9 high.
- Bears view this week as a retest of the prior high (March 9) and want a lower high or double top.
- Bears want a deep pullback testing the 20-week EMA.
- Bears need follow-through selling to show control.
- The market formed a parabolic buy vacuum above the 2022 high (March 9), followed by a deep pullback, creating a one-bar trading range.
- Traders may continue Buy Low, Sell High (BLSH), buying near the lower third and selling near the upper third of the range.
- The market is currently trading around the middle of the range, which acts as a magnet and area of balance.
- Traders will watch whether bears can create a follow-through bear bar. If so, the odds of retesting the 20-week EMA will increase.
- Or will the market stall around the middle of the trading range followed by a retest of the March 9 high in the weeks ahead instead?
- Any escalation or de-escalation in the Middle East could accelerate or reverse the current move.
The Daily crude oil chart
- The market traded slightly higher early in the week, followed by a deep pullback to the 20-day EMA and the middle of the trading range on Wednesday. Thursday and Friday formed consecutive inside bars — an ii (inside-inside) pattern.
- Previously, we said traders would watch whether bulls could generate follow-through buying above the March 23 high to retest the March 9 high, or if the market would stall near the March 23 high, followed by profit-taking.
- Bulls got a retest of the March 9 high this week, followed by a deep pullback.
- They see the move forming a large double bottom bull flag (March 23 and April 8).
- Bulls want the 20-day EMA to act as support, followed by a retest of the March 9 high and a breakout above.
- Bears see this week as a retest of the prior high (March 9) and want a reversal from a double top and a lower high major trend reversal.
- Bears need consecutive bear bars closing near their lows and trading below the 20-day EMA to show control.
- If the market trades higher, bears want it to stall below the March 9 or April 7 high.
- The March 9 bar is a large doji, creating a one-bar trading range where traders may continue Buy Low, Sell High (BLSH), buying near the lower third and selling near the upper third.
- The market is currently trading around the middle of the range, which acts as a magnet and area of balance.
- Traders will watch whether bears can generate follow-through selling below the 20-day EMA.
- Or will the market stall around the 20-day EMA followed by a retest of the March 9 high instead?
- Any escalation or de-escalation in the Middle East could accelerate or reverse the current move.
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